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Peanut butter prices go up, up, up

Consumers will be shelling out more by late 2012 as Kraft and other peanut butter makers raise their wholesale price of the staple food to Canadian retailers by as much as 35 per cent.

This past summer's hot, dry weather devastated the Runner peanut crop, the variety most commonly used in making peanut butter, causing prices of raw peanuts to soar. This will push up the retail price for peanut butter by more that 25 percent on most major brands. (Scott Olson / GETTY IMAGES)

By Debra BlackStaff Reporter

Thu., Nov. 10, 2011

If you love peanut butter, you had better stock up now.

Kraft Canada has announced plans to increase the price of its peanut butter to retailers by 35 per cent as of the end of next January.

That means Canadian consumers will also be digging deeper into their pockets to pay for a beloved staple.

“The U.S. peanut crop is much smaller due to a drought and other reasons, and that’s driving up the price of peanuts significantly,” said Stephanie Minna Cass with Kraft Canada corporate affairs.

“We’re committed to continuing to offer consumers the great taste and high quality Kraft peanut butter they enjoy and thus the increase.”

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Not only has the drought affected the economics of peanut butter. Further complicating the matter is a decision by American farmers to plant more cotton and few peanuts.

“They’ve reduced acreage to begin with because cotton prices went crazy last year,” John Picard, an Ontario-based peanut grower who specializes in snacks and sweet treats told the Star earlier this year.

“Then the weather didn’t cooperate. There was a large drought and yields are down. And the third factor is green energy. So every time you take food out of the food chain it affects prices.”

According to CNN Money, J.M. Smucker Co., which makes Jif peanut butter, just announced it was going to introduce a price hike of around 30 per cent in the U.S.

Kraft also announced a 40 per cent increase in the U.S. The makers of Peter Pan have put up their prices by more than 20 per cent south of the border.

Kraft Canada said it was announcing the increase well in advance so that consumers would know it was coming. The advice of some: stock up on peanut butter now.

“We know that peanut butter is a key staple in people’s homes and we know it’s much loved,” said Cass. “We want to give consumers advance notice so they can plan for their long term and short terms needs.”

Just what Kraft’s price increase will mean for consumers isn’t known.

In an email from the food giant Loblaw an unnamed spokesperson refused to comment on what kind of price hike can be expected on peanut butter, citing its “pricing strategies are competitively sensitive information.”

The spokesperson added the company’s aim is “to price our products and services competitively and we consider a number of factors when making pricing decisions.”

Andrew Walker, Sobey’s vice-president of communications and corporate affairs, said the company was aware of the looming increase but for competitive reasons it doesn’t comment on price hikes for individual products.

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